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Heating fuel costs down as higher need projected

By John Collins, jcollins@lowellsun.com

Updated:
11/16/2012 11:22:06 AM EST

Lower heating-oil prices compared to this time last year, coupled with a long-range forecast for normal temperatures and average snowfall during the next three months has both consumers and oil dealers feeling optimistic about experiencing a rare "win/win" scenario this winter.

But recipients of what's become a shrinking pool of low-income fuel assistance funding may be facing their coldest winter in many years, The Sun has learned.

According to newenglandoil.com, a website updated daily with the most current heating-oil price listings of local dealers in New England's six states, home heating-oil prices in northeastern Massachusetts on Monday ranged from $3.40 to $3.80, with an average price of $3.62.

A year ago, home heating oil in Greater Lowell was retailing for $3.92 per gallon, a dramatic jump up from the fall of 2010's average price of $3.12.

Despite a sun-splashed dose of Indian Summer on Monday that was reminiscent of last year's persistently mild winter, Kim McCrady, co-owner of Colonial Oil of Chelmsford, was upbeat about the prospects for her family-run business to do much higher volume than last year.

"It was extremely mild last winter, and that was nice for the consumers but it made it very difficult for the rest of us that depend on the weather and the cold. Not only us (oil dealers) but the snowplow guys, and even the people who make the plow guys sandwiches in the middle of the night," said McCrady.

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"For them and us, it was a very tough winter."

McCrady noted her fellow oil dealers welcomed the National Weather Service's long-range winter forecast for the Northeast issued last month, even though NWS predicted only "normal to slightly below average snowfall," and "normal to slightly above average" winter temperatures.

"Everything I've read has said we're going to have average (winter) temperatures and average snowfall, but I'll take it over what we had last year," said McCrady.

Similarly, though meteorologists from the National Oceanic Atmospheric Administration predicted temperatures in the Northeast generally will run above average, this winter is still expected to be 18 percent colder than last year, NOAA forecasters said.

As winter begins, heating oil, natural gas and electricity prices should remain fairly stable, but colder temperatures than last winter inevitably will translate to greater fuel consumption and higher heating bills for the average consumer, according to the annual "Winter Fuels Outlook" that was published by the U.S. Energy Department's Energy Information Administration (EIA) this fall.

EIA information specialist Jonathan Cogan said Energy experts expect heating oil consumption to increase by 17 percent in the Northeast this winter, an uptick in demand that will probably push the average per-gallon price of heating oil upward.

Susan Brittain, energy director of Community Teamwork Inc., which administers the federal Low Income Home Energy Assistance Program to eligible residents in Lowell and surrounding towns, said that in 10 days since this winter's Nov. 1 LIHEAP application-window opened, 9,500 area families or individual residents applied for assistance. About 14,500 residents total applied for LIHEAP funding help in both the winters of 2009-10, and 2010-11.

"Over 9,500 applications in the door already is a huge number," said Brittain. Alarming, too, Brittain said is the number of applications CTI has received this month from first-time clients.

Those applicants will be drawing from a funding source that has shrunk due to state and federal budget cuts. Massachusetts' LIHEAP allotment dwindled from $133 million last winter to $106 million this winter.

Worse yet, as a native New Englander Brittain doubts that two mild winters in a row will spare Northeast residents from battling to keep their homes and apartments warm this winter, she said.

"The poorest of the poor right now is being allotted $750 for a deliverable fuel for the winter, and with the fuel going for at least $3.50 a gallon right now, that's not even going to be enough keep them warm until Christmas," said Brittain.

"Granted, heating oil, gas and electric rates aren't as high as they've been in previous years. That's still only as good as the weather. What happens if we go through a really cold spell?"

Unless LIHEAP gets a significant boost from an unknown funding source, Brittain said "a family of four people at 200 percent of the poverty level ($46,100 annual income) will only get $295 for a utility, and $510 for a deliverable fuel.

"Compare that to $2,000. That's not unusual for somebody to spend on heating their home during the fuel season in an average winter," added Brittain. "It's not looking too good, especially when you think of what a real good winter we had last year. This is New England. What are the chances of two (mild winters) in a row?"

In addition to Community Teamwork Inc.'s LIHEAP funding, area residents in need of home heating assistance may also apply to their local Salvation Army branch, and Joe Kennedy's Citizen's Energy fuel assistance program.

Postings with apparently conflicting messages were found on the Citizens Energy's website homepage on Monday, informing visitors: "No one should be left out in the cold," followed by, "Please note: We are no longer accepting applications for the 2012 oil heat season."

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